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Romney on Health Care; Osama bin Laden: Always Plotting; Bracing for Floods
Aired May 12, 2011 - 14:07 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RANDI KAYE, CNN ANCHOR: All politics may be local, but when you run for president, things do get a little tricky. Case in point, former Massachusetts governor and potential 2012 presidential contender Mitt Romney, preparing to write a new prescription for health care in America.
Now, here's the tricky part -- big parts of President Obama's overhaul which Romney and his fellow Republicans want to repeal are based on the plan Romney enacted in Massachusetts, including the so- called individual mandate, the requirement that all Americans buy insurance.
We'll listen in when Romney starts speaking at the University of Michigan. We were showing you a live picture there.
But I want to bring in CNN senior political analyst Gloria Borger to talk a little bit about this.
Gloria, glad you're with us.
As Romney molds his next run for president, tell us more about his health care problem.
GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Well, he has a real health care problem, and it's something that Barack Obama likes to rib him about at every opportunity that he can, which is that they passed in the state of Massachusetts, when he was governor, a version of universal health care, and it's a plan that, in many ways, was the model for what Barack Obama passed. And in that plan, it says that there is a mandate and that people must participate, buy in, so that you can form an insurance pool that's large enough to take care of the very sick, and that was, in fact, the model for Barack Obama's plan.
And so for lots of conservatives, that's a real no-no. And what we hear is Mitt Romney now saying, you know what? I would only have done that on a state level, and it worked for my state, but I would never do that on a national level. I would never have mandated on a national level. So, he's walking it back a little bit.
KAYE: Yes.
BORGER: It's a very fine line. And we'll have to see whether Republicans buy it.
KAYE: Yes, it's interesting, because, really, if you look back at record, he was supporting these individual mandates back to 1994.
BORGER: You bet.
KAYE: And then in 2007 he said he thought it was a terrific idea.
But what do you make of him saying that, hey, the president should have called me and asked me how it's working in Massachusetts before he went ahead and did this?
BORGER: Yes. Well, there's a little 20/20 hindsight in that.
I mean, he's in a bit of a pickle, and he wants to get the Republican nomination right now. And so he's been walking that back. He walked it back last time around, but now repealing President Obama's health care reform is issue number one for Republicans in the Congress. So when repeal is issue number one, it's a real problem for you as a presidential candidate.
What's another problem for him, I might add, that is when he's up against Barack Obama in these early polls, the president still beats him, according to our poll, 54-43. So one would presume we think he's kind of a front-runner. He's been there, done that, and Republicans very often like to nominate the next guy in line. He seems to be the next guy in line.
But this early on, he's got some ground he needs to cover. First, of course, he needs to formally announce that he's running.
KAYE: Right.
BORGER: Which he hasn't done.
KAYE: That would be step number one.
BORGER: Yes. That would be.
KAYE: Or maybe step number two, the way it's going this year. I don't know.
BORGER: Exploratory. Right. I mean, it's sort of time for people to start getting in the race, don't you think?
KAYE: Yes, I do think so.
All right, Gloria. Thank you.
BORGER: Sure.
KAYE: Good to see you. We'll continue to watch and wait for Mitt Romney's speech as well. We'll continue to watch that live picture, along with you.
Other big story this hour, out of sight, under wraps, but still very much in the loop. Ten days after the world's most wanted terrorist was killed by U.S. troops in Pakistan, his own words are proving he never actually stopped plotting and his number one target never changed.
Among the virtual mountain of intelligence that Navy SEALs recovered from bin Laden's compound is bin Laden's own handwritten journal. And the journal, according to a U.S. government official, speaks volumes about the al Qaeda's leader's mindset and methods. The official says bin Laden remained determined to attack the U.S. again and again.
He wanted to strike on dates that are meaningful to Americans -- July 4th, for instance, Christmas, and 9/11. There are also are said to be strong indications bin Laden had back-and-forth communications with others in the al Qaeda network. That contradicts reported claims by Pakistan that he was an out-of-touch figurehead, as they say.
I want to bring in CNN's Reza Sayah now. He's in Islamabad.
Reza, tell us first about bin Laden's fixation with America, because it really wasn't the unanimous view within al Qaeda, was it?
REZA SAYAH, CNN INTERNATIONAL CORRESPONDENT: It wasn't. These documents show that affiliates of al Qaeda in regions like Yemen, Somalia, Algeria, didn't necessarily want to focus on attacks on U.S. soil. They wanted to focus on small-scale attacks within their region targeting their governments they had grievances with, and that appeared to be a source of frustration for Osama bin Laden.
These documents do show, according to U.S. officials, that bin Laden was fixated on the U.S., he wanted to carry out another attack on U.S. soil on the scale of 9/11. And that really shouldn't be a surprise.
For bin Laden, the U.S. has always been enemy number one, and vice versa. Of course, it was with 9/11 that he gained his infamy and other plots against the U.S. It was always his view that the U.S. was the leading cause of oppression, injustice and conflict in this region, and he thought one way to get U.S. forces, to get rid of U.S. presence here, was to kill as many innocent civilians on U.S. soil as possible.
But what's interesting is, according to this "Washington Post" report today, that many al Qaeda affiliates didn't see eye to eye with him in that strategy.
KAYE: Yes, that is so interesting.
I want to ask you, too, about this playbook, as the journal is being described. And the compound is also being described as a command post. As you look into this and learn more about it, does that seem accurate to you?
SAYAH: Yes. Well, based on the information we have, that doesn't seem accurate to me.
A command and control center is a place where someone devises a plan, carries out the order, and the plan is carried out successfully. There's never any indication from what we know of these documents so far that -- the documents show that bin Laden continued to convey some broad instructions, his general view of what he wanted to see happen, and never do we see him deliver a command, and that command, that order, that plan, come to fruition.
He was in touch, according to these documents, with some of his senior officials, Ayman al-Zawahiri, for example, al Qaeda's number two, but the communication was very difficult. The only way to communicate, according to these documents, was to put information on these flash drives, thumb drives, give them to a courier. Obviously, it was very time-consuming. And there's no indication that he even knew where Ayman al-Zawahiri was.
So, some of these details could be scary, could be troubling. But the fact remains, over the past 10 years, never did he devise a plan and see that plan come to fruition.
KAYE: Yes, he certainly wanted to, it seems like, but certainly didn't in the end.
All right. Reza Sayah, thank you. Appreciate it.
Imagine in a few days you could possibly lose your home, everything you own. That is the reality for many living along the Mississippi River. The latest on this historic flooding, next.
(COMMERCIAL BREAK)
KAYE: We are keeping a close watch on historic flooding along the Mississippi River. You can see right here that it's got a path -- its projected path, at least. The floodwaters, slowly snaking its way into the Deep South.
Thousands of residents in Arkansas, Mississippi and Louisiana are in the direct path of this slow-moving flood. You can see it there. And they are bracing for what could destroy their homes and communities.
Along that path is Vicksburg, Mississippi, and that's where Holly Firfer is right now. She joins us live.
Holly, you saw on that map that we just had up, the Mississippi River expected to crest where you are exactly one week from today. Are folks prepared?
HOLLY FIRFER, CNN CORRESPONDENT: Yes, they're prepared, but I don't know how prepared you can be for this amount of water.
You know, we're standing in a parking lot, completely flooded. It's the parking lot of the Diamond Jack Casino, which is closed. That casino is covered up past the first floor, and there's another casino that's closed, two more they're watching very closely.
And everybody is making all kinds of preparations. Let me give you an idea.
This, already, we are already at five feet over flood stage here. And it is expected to crest not until next Thursday. So, as you can imagine, all efforts are on trying to keep the water out as best they can.
Want to show you this barge company over here. They started about two weeks ago with all these sandbags, and they built a Visqueen plastic wall here to try and keep the water from getting in.
But as you can see pumps, they have five pumps pumping water out. It's seeping through fast. They're trying to get it out as fast as it's going in.
And that big barge you see in front, that's normally not there. They brought it there a couple of days ago to try and keep all the wake and the waves from jumping that barrier with that water.
Meanwhile, about a thousand people in the state of Mississippi have been evacuated -- I'm sorry, 1,000 homes have been evacuated and they're saying thousands of people could be evacuated by the time the water crests. Luckily, however, most of the businesses in downtown Vicksburg are on higher ground. So they won't be affected.
The Yazoo River is where all people are watching now. There's about 850 homes in that low-lying area, and they're hoping that there won't be any backwater flooding there -- Randi.
KAYE: All right.
Holly Firfer for us in Vicksburg.
Thank you, Holly.
KAYE: Well, the future is bright for students who excel in math and science, but there aren't nearly enough of them. Some shocking numbers that could affect America's financial future, that's next.
(COMMERCIAL BREAK)
KAYE: In order to compete in the 21st century high-tech marketplace, American kids need to be literate in math and science. But right now U.S. students rank 17th in science and 25th in math among 34 industrialized nations.
Soledad O'Brien takes a look at the crisis in her documentary "don't fail me: Education in America."
(BEGIN VIDEOTAPE)
SOLEDAD O'BRIEN, CNN SPECIAL CORRESPONDENT (voice-over): This is a robotics competition that brings 50,000 high school students into stadiums across the country. The purpose is to inspire kids to take challenging math and science classes, to prepare them for the high tech jobs of the future. It's what American public schools often fail to do.
ARNE DUNCAN, EDUCATION SECRETARY: We've basically had a 19th century model of education that is not preparing enough young people to be successful in the 21st century global economy.
O'BRIEN: Among this year's competitors, Maria Castro, Brian Whitehead (ph), Sean Patel (ph).
MARIA CASTRO, COMPETITOR: I want to become a solar engineer and I want to go to Stanford University.
O'BRIEN: Junior Maria Castro is a student at the mostly Latino Carl Hayden High School in Phoenix, Arizona. The average family here makes less than $30,000 a year.
Guitar player Bryan Whitehead is from middle class Seymour, Tennessee.
(on camera): Are there classes that you are not able to take because they're not offered in the school that you'd like to take?
BRIAN WHITEHEAD (ph), COMPETITOR: Well, I guess any AP classes at all.
O'BRIEN (voice-over): Sophomore Sean Patel (ph) is from upper middle class Montgomery, New Jersey. The son of Indian immigrants, Sean (ph) is already taking two AP classes, which leaves him little time for his favorite hobby -- dancing.
SEAN PATEL, COMPETITOR: I'm taking (INAUDIBLE) Honors, Spanish IV, AP U.S. History I, AP Statistics, English Honors and Chemistry Honors.
O'BRIEN: Soledad O'Brien, CNN.
(END VIDEOTAPE)
KAYE: A big-time hedge fund boss was found guilty of conspiracy and securities fraud yesterday. Does this conviction prove that regulators are finally figuring out how to catch financial crooks?
Ali Velshi and Richard Quest debate that topic next in a special edition of "Q&A." That's after the break.
(COMMERCIAL BREAK)
ALI VELSHI, CNN ANCHOR: "QUEST MEANS BUSINESS," and so do I.
We're here together in the CNN NEWSROOM around the world.
Hello, Richard.
RICHARD QUEST, CNN INTERNATIONAL ANCHOR/CORRESPONDENT: Good day to you, sir.
Each Thursday, Ali and I are coming to you around the world where we talk business, travel, and we talk innovation.
And the important thing, Ali, is what? VELSHI: Nothing is off limits. So, today, Richard, we're talking about hedge fund boss Raj Rajaratnam. He was found guilty of conspiracy and securities fraud yesterday.
Richard, let me start. I've got 60 seconds to make my case.
Richard, this proves that regulators actually do and can have teeth. From time to time they can actually use them.
Raj Rajaratnam is the biggest financial crook most people have never heard of, but he is big. Our viewers constantly ask why no one has been arrested for their role in the financial collapse, and like Bernie Madoff, Raj Rajaratnam didn't cause the crisis, but he was a bad apple and a good old-fashioned cheat. Bringing guys like this down does make the market safer and fairer for all of us.
Now, Richard, I didn't just fall off the turnip lorry, as you would say. I'm not so naive to think that financial cheats will disappear. But this conviction puts the fat cats on notice, or they'll get more careful.
The interesting thing about this case is that Rajaratnam was hung by his own words. They wiretapped him and his co-conspirators and played the recordings for the jury. Now, that should send a shudder through Wall Street. If you're up to no good, someone may be listening or watching your e-mails, and sometimes even your deep pockets and a blue ribbon defense team won't save you -- Richard.
(BUZZER)
QUEST: I so wish that Ali was right, but once again he has shown his naivete, his ingenue acceptance of an environment where greed is good, money speaks, and where the rich don't mind what risks they take to get even richer.
Has Ali Velshi forgotten Michael Milken, Ivan Boesky, Jeffrey Skilling? Has he completely deluded himself about Enron, WorldCom, Madoff, and all the other crooks that came along, took advantage of the markets? And if they were the tip of the iceberg, what rested underneath?
The amount of resources it took to get this Rajaratnam conviction, the wiretaps, even the question over what's insider trading, it doesn't give much hope that this case will be much more than one on its own. To be sure, there'll be a deterrent effect if Rajaratnam gets a heavy sentence, but I have no doubt it won't be long before the men of money are back to business as usual.
Don't be naive.
(BUZZER)
VELSHI: Well, I'm with you. There's probably more aware (ph) of Rajaratnam, and all those who you who named have been hanging out. But hopefully it's getting a little safer out there.
Hey, time for the quiz, Richard. Let's bring "The Voice" in.
Good afternoon, Voice.
THE VOICE: Good day, gentlemen.
QUEST: Good afternoon, Voice.
THE VOICE: Let's hop right into it.
The Dow Jones Industrial Average is an average of 30 stocks. When it started there were only 12. There's only one company of the original 12 still in the index. Name that company.
Is it A, DuPont, B, Procter & Gamble; C, Exxon Mobil; or D, General Electric.
(BELL RINGING)
THE VOICE: Richard?
QUEST: I'm going to go with Exxon Mobil/Standard Oil.
(BUZZER)
THE VOICE: Incorrect.
Ali?
VELSHI: General Electric.
(BELL RINGING)
THE VOICE: That's right. General Electric is the only company of the original 12 still in the index.
QUEST: Good one there. Good one there, Ali. Good one.
THE VOICE: The Global Financial Centres Index is a ranking of the competitiveness of financial centers. The top three cities are London, New York, and Hong Kong.
What city is currently fourth in the rankings? Is it A, Shanghai; B, Tokyo; C, Zurich; or, D, Singapore?
(BELL RINGING)
THE VOICE: Ali?
VELSHI: Tokyo.
(BUZZER)
THE VOICE: Incorrect.
Richard?
QUEST: I would say Shanghai.
(BUZZER)
THE VOICE: Incorrect again.
Go ahead, Ali.
VELSHI: Zurich.
THE VOICE: Still wrong. Good grief!
QUEST: Singapore!
(BELL RINGING)
VELSHI: Wait, does he get a point for that? He can't get a point after we've eliminated three of the four.
THE VOICE: Singapore is the correct answer.
All right. Let's continue on here.
Using the dollar as the standard, China, by far, holds the largest amount of foreign exchange reserves.
Who is second on the list? Is it, A, Brazil; B, the euro system; C, Japan;, or, D, Russia?
(BELL RINGING)
THE VOICE: Richard?
QUEST: I'm going to go with Japan.
(BELL RINGING)
THE VOICE: That is correct. Good job, Richard. Japan has the second largest amount of foreign exchange reserves.
VELSHI: You were thinking Euro system was the other option, right? I was going between Japan and Euro system.
QUEST: No, I was going to go for for Russia as the other one because of its oil well. But the one I'm kicking myself -- I'm kicking myself, kicking myself -- I thought it was General Electric, but I thought The Voice was being clever because of Exxon Standard oil.
THE VOICE: There's no clever in my voice. You guys can discuss this later.
(LAUGHTER)
THE VOICE: You end this round tied. Have a good day.
VELSHI: Thank you very much, Voice. And thank you, Richard. This will do it for us this week. But remember, we're here each week , Thursdays on "QUEST MEANS BUSINESS," 1900 GMT.
QUEST: And in the CNN NEWSROOM. It's at 2 p.m. Eastern. Keep the topics coming on our blogs, CNN.com/qmb and CNN.com/ali. What do you want him and me to do battle with? See you next week, Ali.
See you, Richard.
(END VIDEOTAPE)
(COMMERCIAL BREAK)
KAYE: It's about half past the hour. Time to catch you up on stories you might have missed.
More details are coming out about Osama bin Laden's plans to carry out attacks against the U.S. During that deadly raid on his compound, Navy SEALs seized a handwritten journal that called for more attacks on U.S. soil. Officials say the document, written by bin Laden, reveals information on al Qaeda's doctrine and ideas on how to carry out new attacks. Those messages are believed to have made it out of the compound to other members of al Qaeda.
In Germany, a retired U.S. autoworker convicted of helping murder nearly 28,000 Jews at a Nazi death camp in World War II. John Demjanjuk was sentenced to five years in prison, one year less than requested by prosecutors. Defense lawyers argued that Demjanjuk was a prisoner of war and forced to work for the Nazis. His trial caps a 30-year legal battle over whether he was the camp guard known as Ivan the Terrible. He was freed pending an appeal. Demjanjuk is 91 and had been in custody since being extradited from the U.S. two years ago.
People in Louisiana are scrambling to prepare for the flood. Mississippi River bearing down on the delta and 26 parishes have already declared states of emergency. The National Weather Service says the river's already at flood stage and is still rising.
The Army Corps of Engineers is monitoring the spillways and will open bays according to water levels to try to ease flooding down stream. They expect 16 bays will be open by the end of the day.
Executives from America's five largest oil and gas companies were brought before Congress today to defend keeping their tax breaks. Senate Democrats want to eliminate the tax subsidies and direct the savings to pay down the deficit. The savings would total $21 billion over 10 years. Oil executives vigorously pushed back, calling the proposal discriminatory and counterproductive.
In sports, it hasn't been a very good day for Tiger Woods. He limped off a golf course in Florida today during the first round of the players championship and told officials he was withdrawing from the event for the second straight year. He was six over par after nine holes. This was Woods' first competition since taking part in the Masters last month where he said injured his left knee and his Achilles' tendon. Not good news. A rude welcome for Moammar Gadhafi. We'll look at what happened hours after the Libyan leader appeared on television for the first time in weeks. That's next with Michael Holmes in "Globe Trekking."
(COMMERCIAL BREAK)
KAYE: Breaking news now here on CNN. We have some new information regarding John Ensign who quit the Senate last week. That is the Nevada senator. We want to bring in Dana Bash. Dana, what can you tell us?
DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: I can tell you that the Ethics Committee, which has been investigating the Nevada senator, former Nevada senator now for 22 months, is coming out with a report that we just got. And the headline is that they are referring what they call "criminal violations" to the Department of Justice saying that the former colleague, Senator Ensign, broke lobbying rules by aiding and abetting violations of post-employment contract restricts, made false statements to the FEC, the Federal Election Committee, violated campaign finance laws and more.
Now, they can't do anything to the senator now here in the Senate now that he's gone - the former senator. But the Justice Department and criminal violations, that is a whole different ball game. Of course much, much more serious. In fact, on the Senate floor right now, the Ethics chairman, Barbara Boxer, is explaining the report and why they did this.
(JOINED IN PROGRESS)
SEN. BARBARA BOXER, (D-CA), ETHICS COMMITTEE CHAIRMAN: -- the extraordinary leader, Senator Isaacson. And I say leader.
KAYE: And it's probably too soon, I would imagine, Dana to get reaction. But I do recall, and correct me if I'm wrong here, the reason he was resigning because he didn't want to put his family through this. He didn't want his colleagues on the Senate floor to have to deal with this any longer as well.
BASH: That's right. And it was pretty clear at the time when he resigned -- we should say he resigned, actually left the Senate just at beginning of this month when he announced his resignation, he knew there were more things that boiling, if you will, inside the Senate Ethics Committee investigation.
And just to go back to a little bit of the information, first of all, what happened with Senator Ensign, he had an affair with the wife of a staffer, and the accusations that the committee and the Justice Department apparently were looking into were a couple of things. One, that he helped the husband of the person he was having an affair with. Of course this guy was his top aide -- helped him get a lobbying job, helped him get work with Nevada companies and businesses for that lobbying job, knowing full well that broke rules that, say, nobody who leaves the Senate can lobby for a year. That's clearly what -- something that the Ethics committee thinks that he violated pretty strongly. And the second thing is that John Ensign's parents paid $96,000 to the Hamptons, to this couple that we're talking about here, and his committee, at least -- the former colleagues, believe that in talking about that with the Federal Election Commission, they made false statements, both the senator and his parents what this payment was really about.
KAYE: Hmm. Wow. All right. Well, this is certainly getting even more interesting. Dana, definitely keep us posted if you get any more information this hour. Thank you.
NATO warplanes bombed Moammar Gadhafi's compound again today, just hours after he appeared on television for the first time in two weeks. Michael Holmes is here and joins us now to give us his take on that and also, plus the conflicting reports about who is really in charge in Misrata.
MICHAEL HOLMES, CNN INTERNATIONAL CORRESPONDENT: Yes, let's start with Colonel Gadhafi. What's interesting, this appearance on television actually coming within days of everyone starting to talk, we haven't seen him for a while --
KAYE: After what happened with bin Laden you kind of wonder.
HOLMES: Exactly. So there's speculation. No one knows for sure whether that's why he made the appearance. Interesting, too, he made the appearance at the hotel where all of the Western journalists are staying, which when you think about it is a pretty smart security move because it's hardly going to be on NATO's strike list. So, it was a safe place do this.
Meanwhile, while he's out doing that at hotel or just after -- a couple hours after, the missiles came in on his compound. You can see some of the damage there. Four missiles apparently, or rockets. There were two people killed. Now, this is the same the compound on April 30 was also hit and one of his sons was killed and three of his grandchildren report killed, according to Libyan spokespeople.
Now, Misrata, you're right, it's interesting. There's conflicting reports coming out and it's a bit of a confusing thing. Who is running what there? But there seems to be a consensus now the rebels have gotten a hold of the airport, and that's very significant for a number of reasons. First of all, it gives a buffer between the city itself and Gadhafi's artillery, which has been pounding Misrata for months now and done an awful lot of damage, killed an awful lot of people. Now there's a bit buffer between the artillery and a good chunk of the city. The other thing, too, it could potentially be a place where aid come in.
KAYE: Yes, and they certainly need it there, right? Because hundreds or actually thousands of residents there are without food, without supplies.
HOLMES: It doesn't mean that Gadhafi's people aren't around. They still are. They probably control near the eastern gate of the city, so they still hold a good chunk just outside. But it is good news for rebels if they have taken the airport and have regained the port as well. So, it's very uncertain at the moment what is going on, but it looks like good news for the rebels.
KAYE: I want to also talk to you about Syria where certainly the crackdown's continuing, killings are continuing. Last hour, we actually spoke to Martin Fletcher of "The Times" of London and he had a really interesting story to tell because he was detained there. So, let's just take a listen to that, and then I want you to give me your reaction to it.
(BEGIN VIDEO CLIP)
MARTIN FLETCHER, ASSOCIATE EDITOR, THE TIMES OF LONDON: There were very few people in the streets and those that were were manifestly frightened and talking about explosions and gunfire. The shops and the businesses were largely shut. The public buildings were heavily protected by gun positions.
There were plenty of tanks on the streets. Most of the main intersections were guarded by four tanks, each pointing in one of the four directions. There were checkpoints all around the city and I counted at least 100 tanks ling the road, the highway that leads north out of the city towards Hama and Del Epi (ph).
(END VIDEO CLIP)
KAYE: He went on a tour to the city of Hamms. Incredible that he got in.
HOLMES: It was, it was. I heard your interview, it was fascinating. We had him on CNN International as well.
The other significant thing to mention in Syria is the demonstration that happened at the university in (INAUDBLE). Now, this is the second biggest city in Syria. And we've talked a lot about, it's significant that the demonstrations hadn't reached the capital Damascus, hadn't reached the second largest city. We saw thousands of students in the university protesting. That is something - if that takes hold, if that gets a grip and continues on, that could be a big thing as well.
Although as Martin was saying, the security services there are arresting everyone they can find. Pretty much anyone of fighting age between 18 and 45. Putting them into soccer stadiums, putting them into holding areas just to get them off the streets.
KAYE: Yes. It was so good to talk to him, to have this clear voice from inside Syria who is someone who had been there, who we trust to tell us exactly what was going on.
HOLMES: Good reporter.
KAYE: Yes, very good reporter. All right, Michael, we'll leave it there. Thank you.
Many cities across the U.S. are short on money. But one city is ready to cash in on the run-up to the 2012 election. The business of politics is next.
(COMMERCIAL BREAK)
KAYE: As more political players like Newt Gingrich announces their bids for office, the spotlight on 2012 elections gets only hotter. charlotte, North Carolina, is already feeling the heat as it gets ready to host the Democratic National Convention in September. Tom Foreman takes us there in our "Building Up America" special series.
(BEGIN VIDEOTAPE)
TOM FOREMAN, CNN CORRESPONDENT (voice-over): Charlotte's hockey team is in the playoffs, but the sign overhead says what everyone knows -- the hottest game in this arena is the coming Democratic convention. All over town, new places are opening, old ones are polishing up, and from his office high above it all --
MAYOR ANTHONY FOXX (D), CHARLOTTE, NORTH CAROLINA: This is a stage unlike any other one.
FOREMAN: Mayor Anthony Foxx hears opportunity knocking.
FOXX: It's a pretty aggressive move to go after a convention in the middle of a recession. I mean that doesn't happen in every city.
FOREMAN (on camera): You think it sends a signal --
FOXX: Yes.
FOREMAN: For all sorts of businesses.
FOXX: They're saying Charlotte's growing, Charlotte's progressing, Charlotte's getting ready to even be bigger and better than it already is.
FOREMAN (voice-over): They say the convention will draw 35,000 visitors who will spend up to $200 million on restaurants, hotels and attractions. But local leaders believe the real value goes far beyond that. Beyond politics.
DR. DAN MURREY, EXEC. DIR., HOST COMMITTEE: Part of what we're going to be able to show is not only how well we do in the hospitality aspect, but also how well we function as a community.
FOREMAN: So the city is touting improvements to transit, education, the business climate and quality of life. And it's already working. Some old, stalled projects have started up again and new ones are appearing. The energy giant Siemens, for example, is expanding its huge turbine plant here by 1,000 jobs.
MARK PRINGLE, SIEMENS: Oh, I would say a great -- a vast majority of them. I would say 80 percent of the people we hire will be from the local community.
FOXX: I just think there's a ripple effect of this that's going to go on for decades.
FOREMAN: Building up this town long after the conventioneers go home.
(END VIDEOTAPE)
KAYE: Tom Foreman joins us live from High Point, North Carolina. Tom, how hard has that area been hit by the recession?
FOREMAN: They were hit hard, Randi. I mean, their unemployment is slightly above the national average. Of course, they've lost jobs for years and years in textiles and in home furnishings but building up in other sectors. Energy, like we mentioned there with Siemens. Biomeds, some of the areas they're focusing on. And finance, of course, always a big thing there.
What they think, Randi, is this has really nothing to do with politics in the end. What it has to do with is focusing the nation's attention on their town and as the mayor said, separating them from the pack of many, many other sort of medium-sized cities that in the competitive environment need to stand out. They're betting this is going to make it happen, and come September before the election, we'll know whether or not that's a good bet or not. Randi.
KAYE: Absolutely. All right. Tom Foreman. Thank you, Tom.
Well, it's a question that's asked every time gas prices jump and oil companies announce record profits. Should big oil companies continue to receive tack breaks? Today's "Stream Team" will break it all down right after the break.
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KAYE: With gas prices sitting near $4 a gallon, lawmaker have once again ramped up calls to end tax incentives that they say they oil and gas companies no longer need. Today, representatives of the big five oil companies, Chevron, Shell, BP America, ConocoPhillips and ExxonMobil were called to testify before the Senate Finance Committee. You see, the oil industry enjoys a number of tax breaks that some lawmakers want to eliminate.
So, they introduced legislation called the Close Big Oil Tax Loopholes Act. The act would specifically eliminate tax subsidies for the five big oil companies and it would direct those savings to pay down the deficit. Sponsors of the bill estimate that over ten years, $20 billion would be saved.
So, that brings us to today's question for today's "Stream Team." Should big oil companies still get tax breaks? Daniel Weiss is the director of climate strategy at Center for American Progress, and Diana Furchtgott-Roth is an adjunct fellow at The Manhattan Institute.
Diana, let me start with you. If these tax credits are lifted, will it cost Americans jobs?
DIANA FURCHTGOTT-ROTH, ADJUNCT FELLOW, MANHATTAN INSTITUTE: It most certainly will because these oil companies operate all over the world. We have the highest corporate tax rate in the world. And these deductions, many which other companies have, for example, such as the domestic manufacturing deduction, that lowers the corporate tax rate and makes it similar -- still higher, but closer to what other countries have.
If we get rid of these tax breaks, it's going to be more profitable for oil companies to drill other places such as Brazil. We want them drilling here. We want the jobs here. Not in places like Brazil and Venezuela and Mexico.
KAYE: Dan, do you agree?
DAN WEISS, DIRECTOR OF CLIMATE STRATEGY, CENTER FOR AMERICAN PROGRESS: Absolutely not. In fact, there's no evidence of what Diana said. There's been several independent government studies that have found that getting rid of these tax handouts, some of which are nearly 100 years old, would make no difference in the price of gasoline or the production of oil. And if there's no impact in the production of oil, there's no impact on jobs.
So, this would take back some of the money and put it towards deficit reduction. Otherwise, to reduce the deficit, we're going to have to cut cancer research, food inspections and student aid. I think it makes a lot more sense to cut for big oil companies that are some of the richest companies in the world than to take away money from cancer research.
KAYE: Diana --
FURCHTGOTT-ROTH: Well, it's not going to affect the price of oil, but it is affect where it's produced. Right now, we're subsidizing wind, we're subsidizing solar. Those turbines are made offshore. Those solar panel are made in Japan and Korea. What we want to do is be encouraging oil companies to produce here in the United States so we get the production, we're less dependent on foreign oil and we also, most importantly, get the jobs because our unemployment rate is nine percent now.
KAYE: Dan --
WEISS: Go ahead.
KAYE: Dan, let me ask you a question. Don't big oil companies already pay their fair share of taxes?
WEISS: Well, in fact, ExxonMobil just told "The Washington Post" that last year, it had an effective income tax rate of 18 percent, which is lower than the average effective income tax rate for Jane and John Doe. So, they may be paying taxes, but was they're not paying an excessive amount by any stretch of the imagination.
Meanwhile, ExxonMobil for example has been the most profit public company in the world for eight years running. The last thing they need is getting more of our money when they're already making money hand over fist. They can make a profit, that's great. But they shouldn't also then get huge tax breaks paid for by you and me at the same time we're paying $4 a gallon at the pump.
KAYE: All right. 30 seconds left. Diana, you have 30 seconds. Is there a better way that to to tax big oil?
FURCHTGOTT-ROTH: We need to encourage oil being produced here. These profits go into the pockets of shareholders of these companies, many of whom own pensions invested in the companies. The question is 18 percent higher than these companies would pay elsewhere other places in the world? If our taxes are higher, the oil companies are simply going to produce elsewhere and take the jobs with them.
KAYE: All right. Diana and Dan, clearly, both have VERY strong opinions about this. We appreciate you coming on and sharing them with us. Thank you.
WEISS: Thank you.
FURCHTGOTT-ROTH: Thanks very much.
KAYE: So, where can you make over $100,000 a year for sitting on the beach? Well, I'll tell you next in my XYZ.
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KAYE: Time for my "XYZ."
"Baywatch" it isn't, but it sure pays well. In Newport Beach, California, more than half of the city's full-time lifeguards earn more than $100,000 a year. Lifeguards! And because they're considered city employees, they get a pretty hefty compensation package and pension. When they retire, which they can do at age 50, they get full medical benefits for life. One lifeguard, who reportedly just retired, will bring in $108,000 a year for rest of his life. Now, if you do the math he will make well over $3 million if he lives until his 80th birthday. $3 million for lifeguarding.
Some lifeguards' compensation packages actually exceed $200,000 a year. Now, sure, it's an important job saving lives, but these guys aren't doing so much of that. The city manager in Newport Beach has told reporters that they work ten hours a day, four days a week, mainly driving trucks around, painting towers, ordering uniforms and doing basic office work. None are actually manning the lifeguard towers.
Easy to see why at time when there's much frustration over compensation for public employees and such high unemployment, these bathing-suit clad civil servants are taking some heat. Did I mention a study found that the Stanford University found California taxpayers are facing a pension liability that could exceed $500 billion? Life's a beach, ain't it?
CNN NEWSROOM continues now with Brooke Baldwin.
Hi, Brooke.
